South African Mining Community Speaks Out

While the South African government says its mining charter is on target, many in the country are unhappy. Some Anti-Apartheid activists say there isn’t enough being done and that the change is too slow. The business community is also complaining that too many of the contracts are unfair and do not like the recently approved new charter.

Under the mining charter there is a black ownership target of 15% by 2009 and 26% by 2014, and a 40% representation of historically disadvantaged South African in management. South Africa wants all mining companies to have 26 percent of their equity held by black South Africans by 2014.

To say the least, mining in South Africa is big business. In fact, it has been the main driving force behind the development of the economy, helping make South Africa the richest country on the continent. Mining includes diamond, gold, coal, platinum and similar metals, and Chromium.

According to Mosa Mabuza of the Department of Mineral Resources (DMR), the government is working hard to create equality in the sector. DMR is the primary government institution that is responsible for formulating and implementing policy on mining.

But Anti-Apartheid hero Cyril Ramaphosa, executive chairperson of Shanduka Group and a founder of the National Union of Mineworkers, recently complained publicly that there is need for “radical change” to ensure equitable participation in the mining industry. He said, “When compared with the situation in other countries in Africa, the Mining Charter set modest targets in some areas. The Charter states that a minimum 25% shareholding in a company needs to be in the hands of historically disadvantaged South Africans. If one looks at Zimbabwe, the Indigenisation Law states that 51% shareholding of any venture entered into within the country must be in the hands of ethnic Zimbabweans.”

Add to this a new mining code, published late September, that is causing a stir. The new code gives the ministry new powers to withdraw mining licenses from companies judged to be non-compliant. And according to investors, this move causes concern over nationalization. The government however maintains that the amended code would improve transparency and help redress racial imbalances in the sector.